What is a spendthrift trust?
A spendthrift trust is a type of legal trust created to manage and protect assets for beneficiaries. This type of trust is commonly used in inheritance law in Michigan. It is designed to give the beneficiary access to the funds, while protecting them from irresponsible spending habits. A spendthrift trust allows the beneficiary to receive their inheritance without having to worry about being taken advantage of. This type of trust is managed by a trustee, chosen by the grantor, who is responsible for watching over the trust and ensuring that the beneficiary’s money is used wisely. The trustee is also there to advise the beneficiary on how to best manage the money, and make sound decisions for their financial future. With a spendthrift trust, funds are invested by the trustee, and the beneficiary can only access a certain amount of money at any given time. This prevents the beneficiary from making irresponsible decisions with their inheritance, such as overspending. In Michigan, inheritance law requires that a spendthrift trust be created before any funds or assets are handed over to a beneficiary. This ensures that the beneficiary’s money is protected and used appropriately. It also ensures that the grantor’s wishes are followed, and that the beneficiary receives their inheritance as intended.
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